Beating the Averages and Positioned for Big Gains

America’s electric utilities are on track for a 10^th consecutive year of record capital spending in 2021, according to numbers compiled by the Edison Electric Institute.

That’s closely followed by the $70 billion plus the country’s five largest communications companies plan to spend this year, rolling out 5G wireless and expanding fiber broadband connections. And while pipeline construction remains highly contentious in many places, spending on gas and water systems also remains at elevated levels.

Utilities’ basic formula for shareholder returns is rate based spending consistently boosts earnings and dividends, provided there’s low cost capital and support from regulators. As my analysis in Utility Report Card comments will attest, the majority of companies are currently in a very sweet spot on both counts. And that’s even without any help from the hundreds of billions of dollars headed their way from federal direct spending and tax credits.